I wonder how we got here. Could it be that the so called free market is a farce?
Not sure this is the correct question to be asking.
yes - free market exists 44.4%
no - but we like to believe it does55.6%
18 votes \ poll ended
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I wonder how we got here. Could it be that the so called free market is a farce?
Not sure this is the correct question to be asking.
I don't think it's the right question for this context.
If money is diverting from producing consumer goods into investments in research and development, there will naturally be a reduction in consumer sentiment because the market (free or not) is catering less to consumers of final goods in the present.
If it's generally believed that these investments will be fruitful, stock prices will reflect that in the present.
Fair, enough.
To me it is hard to see how the former necessarily leads to this result, I.e. a reduction in consumer sentiment. Does catering less to consumer goods cause a loss in sentiment?
Isn't it a bit like saying that if a cattle rancher invests less into raising grass-fed cows, then the market feels less confident in buying good quality meat?
What consumers experience in the scenario I’m describing is a reduction in supply, which translates into higher prices.
Consumer sentiment pretty much just reflects the supply of goods.
Where I get confused is that I always thought a lower supply leads to higher prices only if demand increases, but bad sentiment sounds like the opposite is happening.
No, if demand is the same and supply contracts, there will be higher prices. Same money chasing fewer goods, so to speak.
Bad sentiment is consumers feeling like the goods and services they want aren't (or won't be) available at prices they're willing to pay (or maybe just at higher prices than they're used to). Broadly, it's the feeling of being pinched and not able to maintain one's lifestyle. It generally maps to being unhappy with the supply curve.
I see.
so I am curious how you account for the divergence in the two lines on the graph, when previously they seem relatively correlated.
Did previously, s and p growth mirror investment in consumer products more, whereas now it is mostly driven by ai speculation?
That is basically what I'm thinking. I don't know that we've ever seen the economy so tilted towards something that doesn't have direct consumer value.
The story is that AI will radically reduce costs of production in the future, which means eventually the supply curve will shift back outwards and consumers will be happy again.
Maybe consumer sentiment doesn't matter much if you, despite negative feelings, still have to invest a chunk of your paycheck every month into those stonks to be able to get a pension and live a bit once you hit 75... if you're lucky.
Yeah, I think everyone feeling like they're forced to YOLO everything into the market is part of the negative sentiment. Can't get by on hard work. Commies like to blame corporate greed, which is stupid because when have people not been greedy. Personally I blame the extractive, Cantillonistic industries that have coalesced around an out of control money printer.
Would it be fair to assert that weaknesses in systems, especially relatively monolithic ones, will always be exploited?
This is essentially how I once envisioned "Bitcoin fixes this". That is not the popular 2018 Ammous vision of replacing one flawed system with another, but the one where we get a chance to choose our own tradeoffs, and opt out of what we feel works against us while still having something to opt in to.
I think it's fair to assert the correlation, absolutely. Which is why one must always be suspicious of centralized power, wherever that power comes from.
I guess it depends what you mean by free market?
It's like asking if monopolies exist. They do but they don't depending on how pure you wanna get regrading definitions
Right. For example, most yard sales are quite free market: no one asks permission to do it and they don't pay any taxes on the transactions.
However, if you zoom out a bit, there's a context of how the goods were made and how the money was earned previously, as well as the property taxes and other real estate related interventions, which will all have some ties to central planning.
True, and also even at a yard sale most often the MoE will be the state issued fiat currency.
I sort of mean it seems odd to me, admittedly a novice in this, that there can be this kind of rally in spite of the sentiment.
To assume it is free, to me, means folks (I.e. the public) are super bullish on the future of silicon valley tech.
By asking if it is not free, I mean, how much is this perceived optimism propped up by a minority of wealthy broligarchs? But maybe, you are saying, this is what a free market looks like.
S&P appears to be anticipating the Iran war will end and petrodollar hegemony will have once again been enforced.
Free markets are a conceptual model that does not accommodate the reality of how humans organise in groups and use force to promote their group interests over others...a practice sometimes known as imperialism.
I seriously doubt if there is anything like a free market. They is always an entity pulling strings behind.
Humans organise into groups and compete for territory and resources.
The concept of free markets is an abstract one, useful for theorising but inaccurate in regards to the reality of human economic dynamics.
Take Iran- a nation with huge oil and gas wealth- since fossil fuels became strategic assets in the 20th century Iran has been repeatedly attacked by the west in order for the west to gain access to and use of Irans fossil fuel resources.. This involves deliberate subversion of Irans internal politics as occurred in the 1953 coup which was engineered by the CIA and MI6. It has involved sanction on Iran since 1979 and repeated military attacks, assassinations and sanctions of Irans government and trading options.
Free trade is a conceptual construct that overlooks human organisational realities.
The honest version of the poll option is: No, and the people running it benefit from you believing otherwise
I can’t degen leverage trade on Lnmarkets
Markets are not free